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Accounting Policies of Alpa Laboratories Ltd. Company

Mar 31, 2014

COMPANY BACKGROUND

Incorporated as Alpa Laboratories Private Limited on 18th March 1988 under the Companies Act, 1956 and converted to public limited company on 03rd September 1998 with the name of Alpa Laboratories Limited. The Company has been listed on the Bombay Stock Exchange and the National Stock Exchange since 06th August 2007.

1. Basis of Preparation of Financial Statements

The accompanying financial statements have been prepared under the historical cost convention on the accrual basis, in accordance with Indian Generally Accepted Accounting Principles and As per the provisions of the Companies Act, 1956, (the Act). Accounting policies have been consistently applied except where a newly - issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policies hitherto in use.

These financial statements have been prepared assuming the Company will continue as a going concern. Accordingly, the financial statements do not include any adjustments regarding the recoverability of assets and classification of liabilities that might result should the Company be unable to continue as a going concern.

2. Use of Estimates

The preparation of financial statements in conformity with the generally accepted accounting principles requires that estimates and assumptions to be made that effect the reported amounts of assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reported period. Differences between the actual amount and estimates are recognized in the period in which the results are known / materialized.

3. Revenue Recognition

a. The Company generally recognizes income on its accrual and sales at the time of dispatch of goods to the customers.

b. Profit on sale of investments is recorded on transfer of title from the Company and is determined as the difference between the sales price and the carrying value of investment.

c. Interest received is recognized using the time - proportion method, based on rates implicit in the transaction.

d. The value of unutilized unconditional Customs Duty credit granted against exports under "Duty Entitlement Pass Book Scheme" are accounted in the year of export.

4. Expenditure

a. Cost is generally accounted on accrual as it is incurred.

b. Rent payable for premises taken on lease is charged to revenue.

c. Petty consumables for repairs etc are charged to revenue at the time of receipt only.

5. Fixed Assets

a. Fixed asset is stated at their historical cost (net of recoverable taxes wherever credit availed) of acquisition or construction, less accumulated depreciation. Cost includes all cost incurred to bring the asset to their working condition and location.

b. Capital Work in Progress comprises outstanding advances paid to acquire fixed assets and the cost of fixed assets that are not yet ready for their intended use at the Balance Sheet date.

c. Fixed assets are eliminated from financial statements either on disposal or when retired from active use.

6. Depreciation

a. Fixed asset is depreciated on a written down value basis at the rate specified in scheduled XIV of Companies Act 1956.

b. Depreciation for assets purchased or sold during the period is charged to revenue pro-rata to the period of their use.

c. Individual low cost asset (value of less than Rs. 5000) is entirely depreciated in the year of acquisition.

7. Inventories

Finished goods (including for trade), work in process and raw materials are stated at ''Cost or Net Realizable Value, whichever is lower''. Cost of Inventories comprises cost of purchases and other costs incurred in bringing the inventories to their present location and condition. ''First In First Out'' cost formula is used for determination of cost of inventories.

8. Investments

Long term investment are stated at cost of acquisition or book value; book value being arrived at after adjusting provisions for diminution in values of each investment individually, provided such diminution is not temporary.

9. Foreign Currency Transactions

a. Initial Recognition

Transactions denominated in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction.

b. Conversion

At the year-end, monetary assets in foreign currency are translated at the rates of exchange at the Balance Sheet date and resultant gain or loss is recognized in the Profit and Loss Account.

c. Exchange Differences

All exchange differences arising on settlement/conversion on foreign currency transactions are included in the Profit and Loss Account, except in cases where they relate to the acquisition of fixed assets, in which case they are adjusted in the cost of the corresponding asset.

10. Employee Benefit

a. The Company''s contribution to Life Insurance Corporation of India (LIC) for group gratuity policy is charged to the Profit and Loss account each year. The contribution for Group Gratuity Policy is based on values as actually determined and demanded by LIC at the year end.

b. Liability on account of obligation under the employee''s provident fund & employee state insurance, both defined contribution plans, is charged to Profit and Loss account on the basis of actual liability calculated as a percentage of salary.

11. Borrowing Cost

a. Interest and other borrowing costs on specific borrowing attributable to qualifying assets are capitalized.

b. Other interest and borrowing cost are charged to revenue.

12. Service Tax Input Credit

Service tax input credit is accounted for in the books in the period when the underlying service received is accounted and when there is no uncertainty in availing / utilizing the same.

13. Provisions & Contingent liabilities and assets

a. Provisions are recognized only when the Company has present or legal or constructive obligations as a result of past events, for which it is probable that an outflow of economic benefit will be required to settle the transaction and a reliable estimate can be made for the amount of obligation.

b. Contingent liability is disclosed for (i) Possible obligations which will be confirmed only by future events not wholly within the control of the Company or (ii) Present obligations arising from the past events where it is probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of obligation cannot be made.

c. Contingent assets are not recognized in the financial statements since this may result in the recognition of income that may never be realized.

14. Taxation

a. Income taxes are computed using the tax effect accounting method, where taxes are accrued in the same period the related revenue and expense arise. A provision is made for income tax annually based on the tax liability computed after considering tax allowances and exemptions.

b. Income tax expense comprises current tax and deferred tax charged or credit. The deferred tax asset and deferred tax liability is calculated by applying tax rate and tax laws that have been enacted or substantively enacted by the Balance Sheet date.

c. Deferred tax asset on account of timing differences are recognized only if there is reasonable certainty that they will be realized and are reviewed for the appropriateness of their respective carrying values at each Balance Sheet date.

d. Minimum Alternative Tax (MAT) Paid in accordance to the tax laws, which gives rise to future economic benefits in the form of adjustment of future Income Tax liability, is considered as an asset when it is probable that future economic benefit associated with it will flow to the Company and the asset can be measured reliably.

15. Events occurring after the date of Balance Sheet

Material events occurring after the date of the Balance Sheet are considered up to the date of approval of accounts by the Board of directors.

16. Prior Period Adjustments

As per the Accounting Standard - 5, issued by the ICAI, Prior Period Adjustments as a result of errors or omission in the preparation of Financial Statements of one or more prior periods are separately disclosed in the Profit and Loss Account.

17. Leases

Lease Agreements where the risk and reward incidental to ownership of assets substantially vest with the lessor, are recognized as operating leases. Lease rental under operating leases are recognizes in the Profit and Loss statement on a straight line basis.


Mar 31, 2013

1. Basis of Preparation of Financial Statements

The accompanying financial statements have been prepared under the historical cost convention on the accrual basis, in accordance with Indian Generally Accepted Accounting Principles and As per the provisions of the Companies Act, 1956, (the Act). Accounting policies have been consistently applied except where a newly – issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policies hitherto in use.

These financial statements have been prepared assuming the Company will continue as a going concern. Accordingly, the financial statements do not include any adjustments regarding the recoverability of assets and classification of liabilities that might result should the Company be unable to continue as a going concern.

2. U se of Estimates

The preparation of financial statements in conformity with the generally accepted accounting principles requires that estimates and assumptions to be made that effect the reported amounts of assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reported period. Differences between the actual amount and estimates are recognized in the period in which the results are known / materialized.

3. R evenue Recognition

a. The Company generally recognizes income on its accrual and sales at the time of dispatch of goods to the customers.

b. Profit on sale of investments is recorded on transfer of title from the Company and is determined as the difference between the sales price and the carrying value of investment.

c. Interest received is recognized using the time - proportion method, based on rates implicit in the transaction.

d. The value of unutilized unconditional Customs Duty credit granted against exports under "Duty Entitlement Pass Book Scheme" are accounted in the year of export.

4. E xpenditure

a. Cost is generally accounted on accrual as it is incurred.

b. Rent payable for premises taken on lease is charged to revenue.

c. Petty consumables for repairs etc are charged to revenue at the time of receipt only.

5. F ixed Assets

a. Fixed asset is stated at their historical cost (net of recoverable taxes wherever credit availed) of acquisition or construction, less accumulated depreciation. Cost includes all cost incurred to bring the asset to their working condition and location.

b. Capital Work in Progress comprises outstanding advances paid to acquire fixed assets and the cost of fixed assets that are not yet ready for their intended use at the Balance Sheet date.

c. Fixed assets are eliminated from financial statements either on disposal or when retired from active use.

6. D epreciation

a. Fixed asset is depreciated on a written down value basis at the rate specified in scheduled XIV of Companies Act 1956.

b. Depreciation for assets purchased or sold during the period is charged to revenue pro-rata to the period of their use.

c. Individual low cost asset (value of less than Rs.5000) is entirely depreciated in the year of acquisition.

7. I nventories

Finished goods (including for trade), work in process and raw materials are stated at ''Cost or Net Realizable Value, whichever is lower''. Cost of Inventories comprises cost of purchases and other costs incurred in bringing the inventories to their present location and condition. ''First In First Out'' cost formula is used for determination of cost of inventories.

8. I nvestments

Long term investment are stated at cost of acquisition or book value; book value being arrived at after adjusting provisions for diminution in values of each investment individually, provided such diminution is not temporary.

9. F oreign Currency Transactions

a. Initial Recognition

Transactions denominated in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction.

b. Conversion

At the year-end, monetary assets in foreign currency are translated at the rates of exchange at the Balance Sheet date and resultant gain or loss is recognized in the Profit and Loss Account.

c. Exchange Differences

All exchange differences arising on settlement/conversion on foreign currency transactions are included in the Profit and Loss Account, except in cases where they relate to the acquisition of fixed assets, in which case they are adjusted in the cost of the corresponding asset.

10. Employee Benefit

a. The Company''s contribution to Life Insurance Corporation of India (LIC) for group gratuity policy is charged to the Profit and Loss account each year. The contribution for Group Gratuity Policy is based on values as actually determined and demanded by LIC at the year end.

b. Liability on account of obligation under the employee''s provident fund & employee state insurance, both defined contribution plans, is charged to Profit and Loss account on the basis of actual liability calculated as a percentage of salary.

11. B orrowing Cost

a. Interest and other borrowing costs on specific borrowing attributable to qualifying assets are capitalized.

b. Other interest and borrowing cost are charged to revenue.

12. S ervice Tax Input Credit

Service tax input credit is accounted for in the books in the period when the underlying service received is accounted and when there is no uncertainty in availing / utilizing the same.

13. P rovisions & Contingent liabilities and assets

a. Provisions are recognized only when the Company has present or legal or constructive obligations as a result of past events, for which it is probable that an outflow of economic benefit will be required to settle the transaction and a reliable estimate can be made for the amount of obligation.

b. Contingent liability is disclosed for (i) Possible obligations which will be confirmed only by future events not wholly within the control of the Company or (ii) Present obligations arising from the past events where it is probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of obligation cannot be made.

c. Contingent assets are not recognized in the financial statements since this may result in the recognition of income that may never be realized.

14. T axation

a. Income taxes are computed using the tax effect accounting method, where taxes are accrued in the same period the related revenue and expense arise. A provision is made for income tax annually based on the tax liability computed after considering tax allowances and exemptions.

b. Income tax expense comprises current tax and deferred tax charged or credit. The deferred tax asset and deferred tax liability is calculated by applying tax rate and tax laws that have been enacted or substantively enacted by the Balance Sheet date.

c. Deferred tax asset on account of timing differences are recognized only if there is reasonable certainty that they will be realized and are reviewed for the appropriateness of their respective carrying values at each Balance Sheet date.

d. Minimum Alternative Tax (MAT) Paid in accordance to the tax laws, which gives rise to future economic benefits in the form of adjustment of future Income Tax liability, is considered as an asset when it is probable that future economic benefit associated with it will flow to the Company and the asset can be measured reliably.

15. E vents occurring after the date of Balance Sheet

Material events occurring after the date of the Balance Sheet are considered up to the date of approval of accounts by the Board of directors.

16. P rior Period Adjustments

As per the Accounting Standard – 5, issued by the ICAI, Prior Period Adjustments as a result of errors or omission in the preparation of Financial Statements of one or more prior periods are separately disclosed in the Profit and Loss Account.

17. L eases

Lease Agreements where the risk and reward incidental to ownership of assets substantially vest with the lessor, are recognized as operating leases. Lease rental under operating leases are recognizes in the Profit and Loss statement on a straight line basis.


Mar 31, 2012

(1) Basis of Preparation of Financial Statements

The accompanying financial statements have been prepared under the historical cost convention on the accrual basis, in accordance with Indian Generally Accepted Accounting Principles and as per the provisions of the Companies Act, 1956, (the Act). Accounting policies have been consistently applied except where a newly - issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policies hitherto in use.

These financial statements have been prepared assuming the Company will continue as a going concern. Accordingly, the financial statements do not include any adjustments regarding the recover-ability of assets and classification of liabilities that might result should the Company be unable to continue as a going concern.

(2) Use of Estimates

The preparation of financial statements in conformity with the generally accepted accounting principles requires that estimates and assumptions to be made that effect the reported amounts of assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reported period. Differences between the actual amount and estimates are recognized in the period in which the results are known/ materialized.

(3) Revenue Recognition

a. The Company generally recognizes income on its accrual and sales at the time of dispatch of goods to the customers.

b. Profit on sale of investments is recorded on transfer of title from the Company and is determined as the difference between the sales price and the carrying value of investment.

c. Interest received is recognized using the time - proportion method, based on rates implicit in the transaction.

d. Dividend income is recognized on receipt basis.

e. The value of unutilized unconditional Customs Duty credit granted against exports under "Duty Entitlement Pass Book Scheme" are accounted for in the year of export.

(4) Expenditure

a. Cost is generally accounted on accrual as it is incurred.

b. Rent payable for premises taken on lease is charged to revenue.

c. Petty consumables for repairs etc are charged to revenue at the time of receipt only.

(5) Fixed Assets

a. Fixed asset is stated at their historical cost (net of recoverable taxes wherever credit availed) of acquisition or construction, less accumulated depreciation. Cost includes all cost incurred to bring the asset to their working condition and location.

b. Capital Work in Progress comprises outstanding advances paid to acquire fixed assets and the cost of fixed assets that are not yet ready for their intended use at the Balance Sheet date.

c. Fixed assets are eliminated from financial statements either on disposal or when retired from active use.

(6) Depreciation

a. Fixed asset is depreciated on a written down value basis at the rate specified in scheduled XIV of Companies Act 1956.

b. Depreciation for assets purchased or sold during the period is charged to revenue pro-rata to the period of their use.

c. Individual low cost asset (value of less than Rs. 5,000) is entirely depreciated in the year of acquisition.

(7) Inventories

Finished goods (including for trade), work in process and finished goods are stated at 'Cost or Net Realizable Value, whichever is lower'. Cost of Inventories comprises cost of purchases and other costs incurred in bringing the inventories to their present location and condition. 'First In First Out' cost formula is used for determination of cost of inventories.

(8) Expenditure during Construction and on new project

In the case of new industrial units and substantial expansion of existing units, all pre-operating expenditure specifically for the project, incurred up to the date of installation, is capitalized and added pro-rata to the cost of fixed assets.

(9) Investments

Long term investment are stated at cost of acquisition or book value; book value being arrived at after adjusting provisions for diminution in values of each investment individually, provided such diminution is not temporary.

(10) Foreign Currency Transactions

a. Initial Recognition: Transactions denominated in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction.

b. Conversion: At the year-end, monetary assets in foreign currency are translated at the rates of exchange at the balance sheet date and resultant gain or loss is recognized in the Profit and Loss Account.

c. Exchange Differences: All exchange differences arising on settlement/conversion on foreign currency transactions are included in the Profit and Loss Account, except in cases where they relate to the acquisition of fixed assets, in which case they are adjusted in the cost of the corresponding asset.

(11) Employee Benefit

a. The Company's contribution to Life Insurance Corporation of India (LIC) for group gratuity policy is charged to the profit and loss account each year. The contribution for Group Gratuity Policy is based on values as actuarial and determined and demanded by LIC at the year end.

b. Liability on account of obligation under the employee's provident fund, a defined contribution plan, is charged to profit and loss account on the basis of actual liability calculated as a percentage of salary.

(12) Borrowing Cost

a. Interest and other borrowing costs on specific borrowing attributable to qualifying assets are capitalized.

b. Other interest and borrowing cost are charged to revenue.

(13) Service Tax Input Credit

Service tax input credit is accounted for in the books in the period when the underlying service received is accounted and when there is no uncertainty in availing/ utilizing the same.

(14)Provisions & Contingent liabilities and assets

a. Provisions are recognized only when the Company has present or legal or constructive obligations as a result of past events, for which it is probable that an outflow of economic benefit will be required to settle the transaction and a reliable estimate can be made for the amount of obligation.

b. Contingent liability is disclosed for (i) Possible obligations which will be confirmed only by future events not wholly within the control of the Company or (ii) Present obligations arising from the past events where it is probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of obligation cannot be made.

c. Contingent assets are not recognized in the financial statements since this may result in the recognition of income that may never be realized.

(15)Taxation

a. Income taxes are computed using the tax effect accounting method, where taxes are accrued in the same period the related revenue and expense arise. A provision is made for income tax annually based on the tax liability computed after considering tax allowances and exemptions.

b. Income tax expense comprises current tax and deferred tax charged or credit. The deferred tax asset and deferred tax liability is calculated by applying tax rate and tax laws that have been enacted or substantively enacted by the Balance Sheet date.

c. Deferred tax asset on account of timing differences are recognized only if there is reasonable certainty that they will be realized and are reviewed for the appropriateness of their respective carrying values at each Balance Sheet date.

d. Minimum Alternative Tax (MAT), paid in accordance to the tax laws, which gives rise to future economic benefits in the form of adjustment of future Income Tax Liability, is considered as an asset when it is probable that future economic benefit associated with it will flow to the Company and the asset can be measured reliably.

(16)Events occurring after the date of balance sheet

Material events occurring after the date of the Balance Sheet are considered up to the date of approval of accounts by the Board of Directors.

(17) Prior Period Adjustments

As per the Accounting Standard-5, issued by the ICAI, Prior Period Adjustments as a result of errors or omission in the preparation of Financial Statements of one or more prior periods are separately disclosed in the Profit and Loss Account.

(18) Leases

Lease Agreements where the risk and reward incidental to ownership of assets substantially vests with the lessor, are recognized as operating leases. Lease rental under operating leases are recognizes in the profit and loss statement on a straight line basis.

 
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